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Group wants bankrupt Grant Farms produce to pay for $1.5 million note

Migrant workers take an afternoon break in the fields where they are planting onions on the Grant Family Farms in Wellington. (Joe Amon, Denver Post file)

A year-old Boulder-based fund designed to nurture local food systems says bankrupt Grant Family Farms owes it $1.5 million and that thousands of bushels of vegetables could cover the tab.

Localization Partners on Tuesday asked a bankruptcy judge to relinquish the produce — the bulk made up of about 26,000 bushels of organic corn — before it goes bad, according to papers filed in U.S. Bankruptcy Court in Denver.

The consortium was created last year by Transition Colorado, a grassroots group focused on shifting food consumption to local food economies, and invests in local agri-businesses.

The farm's production and proceeds were collateral for the loan, documents show.

"This is our life ... our personality ... our work," Grant said in an interview Tuesday. "To do this is sickening. And it's doubly sickening when we know the farm had the best year ever in our existence."

He refused to elaborate the reasons behind the bankruptcy.

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A spokesman for Localization Partners said the loan was necessary to keep the farm operation alive.

"We saw no possibility the farm in its current state could deliver on the contracts it had made with (Community Supported Agriculture) members," said Michael Brownlee, co-founder of Transition Colorado, which runs LP.

Brownlee said he believed it "likely" that a judge would allow the group to seize the produce and market it to "retail outlets."

Although the farm has said its liabilities top $1 million, it has until Friday to file the list of creditors and what they're owed.

In its filing, LP says it should be allowed to seize the corn, worth about $364,000 today, as well as about $100,000 in beets, onions, squash and potatoes stored on Grant's farm in Wellington.

The partnership also wants about $300,000 in planted products such as winter wheat and spinach growing at other farms leased by Grant.

"The value of these crops can decrease rapidly if not stored properly," LP said in its petition.

Jason Pohl contributed to this report.

David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya